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Ten companies to avoid over their response to COVID-19

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By

Josie Wexler

Tuesday 12th of May 2020

Here are ten companies whose behaviour in the midst of this crisis has stood out to us as exceptionally poor.

Amazon

Amazon has been crowned as the clear financial winner from the coronavirus crisis. Sales have soared after the shutting of bricks-and-mortar shops, and it’s share price has risen by more than a third in the last month.

Workers claim that Amazon has failed to provide face masks, has refused to pay sick leave (the US is one of the few wealthy countries in which companies are not required to), is not allowing workers proper time to wash their hands, and that too many people are working at once to allow for proper social distancing. The fight intensified after Amazon fired four workers who had publicly criticised safety measures.

We have long been critical of Amazon’s tax avoidance, which is especially galling now that the crisis has thrown into sharp relief just how much NHS capacity has been depleted by cuts.

Clothing companies

Sports Direct

Sports Direct is part of the Frasers group owned by billionaire Mike Ashley. The behaviour of Ashley and the company have long been notorious, but not everyone appreciates just how many faces the company has.

Mike Ashley initially refused to shut his shops during the lockdown, arguing they were an "essential service", although he backed down and apologised after a huge backlash from staff, MPs and the media.

However, it is reported that staff on zero hours contracts will not be paid while the shops are shut. And online retailing continues. There have been some reports that social distancing is not being properly observed within Sports Direct warehouses, but they aren’t as corroborated as they are in the case of some other shops, for example Amazon (above) or JD Sports (see below).

JD Sports has been very strongly criticised after photos surfaced of workers crammed in its distribution centre near Manchester. Workers told ITV news that they don’t feel safe and that it is impossible to fulfill the thousands of orders coming in while staying two metres apart. They claimed when the council visited extra gloves were handed out and workers were asked to move around so it looked like fewer people were working.

One worker told Birmingham Live:

"When you leave you have to queue for security checks and then you’ve also got the clocking in machine to make sure you get paid, which uses a finger print. Around 2,000 people in one day are going to be using that same fingerprint machine. It seems they are more worried about money than people's health."

Arcadia Group

The group’s egregious behaviour over tax has long been notorious, and its behaviour over Coronavirus was entirely in keeping with that. Those on temporary contracts were laid off with no redundancy money after Arcadia Group closed its 300 UK stores one hour before the government announced its coronavirus job retention plan.

Arcadia group’s 2019 financial figures did indicate that the company has recently been making a loss.

An ambiguous case – ASOS

ASOS has been subject to boycott calls and petitions over its treatment of warehouse workers and delivery drivers since the start of the crisis.

The Independent Workers' Union of Great Britain (IWGB) called for a boycott over delivery drivers who are being made redundant because ASOS is switching its delivery company from Menzies to DPD. The IWGB considers DPD to have much worse working conditions as it pays couriers per parcel rather than an hourly rate. Still, workers were promised that they would be re-employed by the new company, but four days later were told that this wasn’t happening and they were being made redundant.

ASOS is also still refusing to shut, unlike other clothing retailers such as Next, TK Maxx, and River Island, who have all been pressured into shutting their online operations. There have been accusations about conditions in its Barnsley warehouse, with 98% of staff respondents to a GMB saying that they felt unsafe as they were working too close to one another. There have also been claims that workers are not being allowed to wear masks as it isn’t part of the uniform.

There is contradictory evidence regarding some of the claims against ASOS, however. Barnsley council visited the warehouse and said that that ASOS is complying with social distancing measures and that claims that three ambulances had visited the site during the weekend of the 28-29 March were false.

ASOS has had falling profits recently, but it still made £33.1m profit in the year ending 31st August 2019.

Britannia Hotels

Britannia Hotels was one of the companies which behaved most shockingly early on in the crisis. It sent letters to the staff at the Coylumbridge Hotel near Aviemore sacking them and ordering them to leave their company accommodation immediately. After a backlash from politicians and on social media, the company apologised and said that the letters had been an administrative error – oops!

Britannia Hotels' operating profit rose in 2019 to £19.3m.

EasyJet

EasyJet has been accused of engaging in gross profiteering. It announced on the 22nd March that it would go ahead with a £174 million dividend payout to shareholders, £60 million of which went to its billionaire founder, Sir Stelios Haji-Ioannou.

It argued that the dividend payment was legally binding because it was agreed in February. However, others have argued that it could have sought to withhold it in light of the crisis, and it did not. Despite having previously claimed that it was not seeking a bailout of public money, on 6 April it announced that it was receiving a £600m bailout loan from UK Treasury and Bank of England.

Travelodge

Travelodge is currently owned by GoldenTree Asset Management, Avenue Capital, and Goldman Sachs. After the lockdown was announced it closed its premises and threw out homeless families housed there by local councils, seemingly in defiance of government guidance that said that hotels looking after homeless families should not close. It gave one council four hours notice to relocate vulnerable people, including an 84-year-old resident.

Delivery companies

DPD and Hermes

DPD and Hermes have both been heavily criticised for their treatment of self-employed couriers.

DPD is actually three quarters owned by the French government. It has offered self-employed couriers who need to self-isolate only the equivalent of statutory sick pay (£94.25 a week), and said that the costs of renting equipment and vans will not be waived, and they will have to be paid back in the future.

This is, however, not as poor as Hermes, which is owned by The Otto Group, a German e-commerce giant. Hermes has around 15,000 self-employed parcel couriers and says that it will only pay £20 a day to those self-isolating if they typically earn less than £90 a day, which means that almost half its workers will receive nothing.

DPD Group UK made £118m in profit in 2018 and Hermes made £29m.

Delivery companies are a way that the virus may be spread around the country. Encouraging workers to continue working when they may be contagious is dangerous for everyone.

This is only the top ten

There are many other companies who have not covered themselves in glory, including Deliveroo, Virgin Group, Boohoo, Gordon Ramsey, Dexter’s Estate Agents, Next, Waterstones, Uber and Lyft.

A company that we’ve left off the list because it is very difficult to avoid is the Royal Mail. However, staff at eight different sites have walked out over safety concerns over the last couple of weeks. The BBC says that it has seen footage of staff working shoulder-to-shoulder. Employees have also said that there is a shortage of gloves, masks and hand sanitiser. The Royal Mail is now entirely privately owned, and workers have accused the company of putting “profits before safety”.

It would be remiss not to mention that there have been many companies who have responded in positive ways as well. At Monzo, for example, senior management and the board have volunteered to take a 25% salary cut and the CEO has announced that he won’t take a salary at all for the next 12 months.

Readers have also contacted us about Holland and Barrett, which has been the subject of a petition to shut its shops, which it refuses to do on the basis that it is an essential service. In the petition, which went live in early April, staff said they were not being supplied with hand wash and other essential equipment. Sign the petition here.

More details on companies’ responses to the crisis – positive and negative - can be found here.

A note from the author of this article: In the original version of this article we said that EasyJet had been engaging in gross profiteering by making a large dividend payout during the COVID period. We should have mentioned that EasyJet claims that this dividend payout had been agreed in February, before the COVID crisis had developed, and was from that point legally binding. However, others have argued that this is a cop-out, that the company could have sought permission to withhold the payments in light of the crisis, and it did not.